Value investing has created more billionaires than any other strategy, like Warren Buffett, who built his fortune by purchasing wonderful businesses at reasonable prices. But these hidden gems are few and far between - many stocks that appear cheap often stay that way because they face structural issues.
This distinction between true value and value traps can challenge even the most skilled investors. Luckily for you, we started StockStory to help you uncover exceptional companies. That said, here are two value stocks offering compelling risk-reward profiles and one with little support.
One Value Stock to Sell:
Boyd Gaming (BYD)
Forward P/E Ratio: 13.1x
Run by the Boyd family, Boyd Gaming (NYSE: BYD) is a diversified operator of gaming entertainment properties across the United States, offering casino games, hotel accommodations, and dining.
Why Do We Steer Clear of BYD?
- Lackluster 4.6% annual revenue growth over the last two years indicates the company is losing ground to competitors
- Estimated sales decline of 12% for the next 12 months implies a challenging demand environment
- Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
Boyd Gaming is trading at $86.99 per share, or 13.1x forward P/E. Check out our free in-depth research report to learn more about why BYD doesn’t pass our bar.
Two Value Stocks to Watch:
Qualcomm (QCOM)
Forward P/E Ratio: 14.2x
Having been at the forefront of developing the standards for cellular connectivity for over four decades, Qualcomm (NASDAQ: QCOM) is a leading innovator and a fabless manufacturer of wireless technology chips used in smartphones, autos and internet of things appliances.
Why Are We Positive On QCOM?
- Annual revenue growth of 16.6% over the last five years was superb and indicates its market share increased during this cycle
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
Qualcomm’s stock price of $166.11 implies a valuation ratio of 14.2x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
PayPal (PYPL)
Forward P/E Ratio: 12.7x
Originally spun off from eBay in 2015 after being acquired by the auction giant in 2002, PayPal (NASDAQ: PYPL) operates a global digital payments platform that enables consumers and merchants to send, receive, and process payments online and in person.
Why Are We Fans of PYPL?
- Decent 10.9% annual revenue growth over the last five years beat most of its peers, showing customers find value in its products and services
- Share repurchases have increased shareholder returns as its annual earnings per share growth of 12.6% exceeded its revenue gains over the last two years
- ROE punches in at 20%, illustrating management’s expertise in identifying profitable investments
At $66.93 per share, PayPal trades at 12.7x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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